FARNBOROUGH, England— Sir Richard Branson, the billionaire founder of the private space tourism company Virgin Galactic, unveiled plans today (July 11) to add satellite launches to its list of commercial space services, with the first flights to blast off in 2016.

Branson announced the new small-satellite launch service, which will feature an expendable two-stage liquid-fuelled rocket called LauncherOne, in a briefing here at the 2012 Farnborough Air Show. The satellite launcher already has customers lined up for the first flights, Virgin Galactic officials said.

"I’m delighted to say that we can announce the next step of the Virgin Galactic journey," Branson said as he unveiled LauncherOne. "A step that will bring great long-term benefits to our existing SpaceShipTwo program. It will unlock new technologies and will help fast-track the potential of space as a positive force for powerful change."

Work over the last year has produced a design that will be air-launched from Virgin Galactic’s carrier aircraft WhiteKnightTwo, the same mothership that will launch the company's SpaceShipTwo on suborbital passenger flights.

SpaceShipTwo is a manned spacecraft designed to fly two pilots and six passengers on short suborbital spaceflights that reach more than 62 miles (100 kilometers) above Earth, offer a few minutes of weightlessness and then return to a runway landing. Tickets for SpaceShipTwo flights cost $200,000 apiece. [Video: Virgin Galactic Unveils LauncherOne Rocket]

Meet LauncherOne

For $10 million, the LauncherOne rocket will launch satellites into orbit for paying customers, Virgin Galactic officials said. The rocket will be able to loft payloads of up to 500 pounds (225 kilograms) into a low-Earth orbit and carry a 225-pound (102-kg) satellite into a sun synchronous orbit.

In a novel service, the payload will be integrated to the LauncherOne booster at the customer’s preferred launch site, which could be an airport, Virgin Galactic officials said.

LauncherOne's first test flight is expected in 2015. The rocket will use liquid oxygen and kerosene, not the hybrid engine used by the SpaceShipTwo passenger-carrying spacecraft.

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Customers on board

Steve Isakowitz, Virgin Galactic’s chief technology officer, said the LauncherOne system already has secured deposits for dozens of launches, with one of those customers being the asteroid-mining firm Planetary Resources. Planetary Resources plans to launch many small space telescopes in upcoming years to search for asteroids containing valuable minerals.

Isakowitz also said LauncherOne’s propulsion system will be derived from existing technologies, and that Virgin Galactic’s recent contract with the U.S. Department of Defense on a small satellite launching program would lead to future reductions in costs.

The advantage of the WhiteKnightTwo and LauncherOne system is the carrier aircraft’s ability to operate over the ocean and at high altitude, above nearly all weather phenomena, reducing traditional launch range restrictions, Virgin Galactic officials said. The use of WhiteKnightTwo for other activities, such as SpaceShipTwo’s tourism and microgravity science flights, will spread the cost of the carrier aircraft in order to achieve the $10 million launch price target for LauncherOne, they added.

In June, SPACE.com reported that Virgin Galactic would likely unveil a satellite launcher at Farnborough after the company's commercial director Stephen Attenborough mentioned the new small satellite business, which he called Virgin Galactic Cargo, at the Royal Aeronautical Society’s 3rd European space tourism conference.